Answer / sonali

Deffered tax is either tax asset or tax liability. It is
temporary difference between book (accounting) value of
assets and liabilities, and their tax value.

Answer / vatika

deferred tax is the future tax liab or asset due to diff in
the taxable value and original value of an asset...

Answer / chalapathi rao govada

Differed Tax is difference in the tax liability as per
Accounting profit and Tax liability as per Income tax Act
(sec 115JB).

Differed tax araises due to timing differences of
recognition of various tax deductible transactions in both
Accounting and tax calculations.

Eg: Depreciation on Fixed Assets.

for example As per companies act one asset is eligible for
100% depreciation in the first year itself, but the case
may not be the same under sec 32 of the Income tax act it
may gives some other rate of depreciation on that
asset.lets assume it allows only 50% in the first year and
remaining in the subsequent year.

as per accounting books shows a lower profit and tax
liabiltity due to higher depreciation claimed in this year
ony compared to IT profit.

It is a clear case of Differed tax asset..... we will pay
more in this year we will carry it as a differed tax asset
in our balance sheet which is going to be offset in the
coming year...... in the short range period difference will
apprear but in long range timing difference is going to be
setoff.....


One more thing Differed tax will not araise due to
permanent differences between these two profits.

If you reverse the above example it will give the situation
of differed tax Liability.

Answer / akhil jain

difference bitbeen depreciation as per income tat &
depreciation as per company

Answer / ashu

deferred tax is the future tax liab or asset due to diff in
the taxable value and original value of an asset...

Answer / vinay

A tax liability that a company owes and does not pay at
that current point, although it will be responsible for
paying it at some point in the future. This is often caused
by a difference in a company's balance sheet, due to the
differences between accounting practices and tax
regulations. Occasionally, a company will have a difference
in their taxable income and income before tax due to these
differences, resulting in a deferred tax liability.

Answer / ali shaikh

To get into Deffered Taxes .. Lemme cleard the basis:

Book Income: Income calculated suing accounting principles
in accordance with GAAP.

Taxable Income: Income calculated in accordance with the
Government stipulated policies and procedures, that govern
tax laws.

Now put simply the concept of DEFFERED TAXES arises beacuse
there is a difference in the amount of tax liablity
calculated using accounting principles as VS. tax
liablities using Government mandated laws.

=> Therefore the reason why DEFFERED TAXES occour is due to
temporarily timings difference between book value and
taxable income.

Example: A company uses Straight-Line Method of
depreciation for its accounting records. But the law allow
an accelerated depreciation method of writing of an assets.
The company takes advantage of this due to favourable tax
treatment in as much as it's able to report lower income
and hence pay lower taxes.

by- Ali Shaikhpearz (ali_brainbugs@hotmail.com)

Answer / lakshmi

deffered tax is nothing but saving the money for the future
safety particularly deals with the tax inspite of
depriciation.

Answer / dev

Deferred tax is an accounting concept, meaning a future tax
liability or asset, resulting from temporary differences
between book (accounting) value of assets and liabilities
and their tax value, or timing differences between the
recognition of gains and losses in financial statements and
their recognition in a tax computation.

Answer / t.t.abhishek

Kindly solve the following problem. Financial accounting. 1. Bheema does not maintain his book in the double entry system . His books showed following facts. Receipts for the year ended 31.12.2007 from sundry Debtors 17625.00 Cash sales 4125.00 paid by bheema (proprietor) 2500.00 total 24250.00 payments made for the year ended 31.02.2007 new machinery purchased 625.00 drawings 1500.00 wages 6725.00 salaries 1125.00 interestpaid 75.00 telephone 125.00 Rent 1200.00 lighting 475.00 sundry expenses 2125.00 sundry creditors 7625.00 total 21600.00 Assets and Liabilities As on 31.12.2006 As at 31.12.2007 sundry creditors 2525.00 2400.00 sundry Debtors 3750.00 6125.00 Bank 625.00 ? stock 6250.00 3125.00 plant 7500.00 7315.00 from the Above data , prepare TRADING A/C, PROFFIT & LOSS A/C for the year ended 31st december 2007 and the BALANCE SHEET as on on that date. Kindly solve the problem

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